The Goal: Create tax rules that identify which product tax categories are taxable in which tax regions, so your taxable goods and services are correctly taxed.
Before You Begin:
- Setting up taxes is a multistep process. If any of your goods/services are taxable, you will need to configure each of the following in order:
- You should have your product tax categories and tax regions already configured, since tax rules connect the two. Note that some tax rules may have been created automatically when you created your regions.
Step-by-Step Instructions
Tax rules allow you to identify which product tax categories are taxable in which tax regions. These tax rules may have been automatically created when you created regions, but you may add additional tax rules on the Tax Rules page.
- Go to Finance, Tax Settings section, click Tax Rules.
- Click the Add button to create a new tax rule.
- Select a Region Name from the drop-down box. This is the region in which this rule will apply.
- Select a Product Tax Category from the drop-down box. This is the product category that will be taxable in the selected region.
- Click Done.
The next step is to set up your tax rates.
Common Pitfalls
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Missing tax rules: When product tax categories are added to regions, those combinations become the Tax Rules displayed on the Tax Rules page. If a taxable item is not being taxed in a region, confirm a tax rule exists linking that product tax category to that region.